Blue is the colour (of this man’s politics): Chuka Umunna should be in the Conservative Party.

It seems Mr Umunna is even ready to sink his own credibility in order to undermine the party he still claims to represent.

He has written an article in The Independentwhich Oxford University macroeconomist Professor Simon Wren-Lewis has rubbished in his Mainly Macroblog.

This Writer’s only criticism is that Prof Wren-Lewis headlines his article with a claim that it is a sign of “Labour’s growing macroeconomic illiteracy” – when it is far more likely to be a sign that Chuka should cross the floor and join the Conservatives he most closely resembles.

Chuka wrote: “To be running a deficit in 2007, after 15 years of economic growth, was still a mistake. My party’s failure to acknowledge that mistake compromised our ability to rebuild trust in 2010 and in 2015. If a government can’t run a surplus in the 15th year of an economic expansion, when can it run one?”

This is the Tory line in a nutshell – and nonsense. Mainly Macro‘s response: “What Umunna is saying here is much the same as George Osborne’s proposed rule: in normal times when the economy is growing run surpluses. But Osborne is saying that in the context of the current debt to GDP ratio of 80% of GDP. Umunna is implying that policy still made sense back in 2007 when the debt to GDP ratio was below 40%, the output gap was thought to be small and no one was expecting a global financial crisis.

“I would love to know who the economists are that gave Umunna the advice that led to this article,” writes Prof Wren Lewis. Who says anybody did?

To prevent claims that he is over-exaggerating a couple of sentences from a larger article, the Professor again quotes Chuka: “Reducing the deficit is a progressive endeavour – we seek to balance the books because it is the right thing to do.” This claim – that it is “the right thing to do” is straight out of the Tory phrasebook.

The response: “Would he give the same advice to UK businesses: refrain from borrowing and focus on paying back your debt? Somehow I think not. The Conservatives have a kind of excuse for deficit fetishism – it is a useful device for shrinking the state. That excuse should not apply to senior Labour figures.”

This Blog can see little future for Labour if a politician with so much sympathy for Conservative policies – and so little understanding of economics – remains on Labour’s front bench. Chuka has had his day.

By continuing to bang on about the deficit he’s conveniently helping stop any related conversations from going elsewhere, like jailing bankers, for example. I understand his office staff are supplied by Big 4 accountants Price-Waterhouse Cooper, who I believe have many of the major banks as clients. Hmmmm… the thought does cross my mind perhaps the PWC staff supplied more than a mop and a bucket this week 🙂

Another Tory plant. These people definitely need to be weeded out sooner rather then later.

If you have to save your money during the good times – assuming even this is correct considering we issue our own currency without anything to back it up – and bail the economy out with those savings in the hard times, when do we have a desperately needed increase in spending on the NHS and schools? Because for sure they’ll be at the back of the queue in a recession.

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